TV

What's your client risk aversion?

Canadians are only now starting to take investments with higher-risk returns, but how long will that last and do you have the opportunities to satisfy those more adventurous clients?

Video trancript below:

Reporter: Market fluctuations are an advisor’s albatross, when losses must be explained, client trust has to be regained. But is investor risk aversion lifting? This week on WP TV.

The recession of 2008-2009 wreaked havoc on investor confidence. In its wake advisors were left convincing clients to ride the waves to the other side.

Chris Karram, Co-Chief Executive Officer, Financial Advisor, SAFEBRDGE Financial Group
Chris Karram: Every client is different and no matter you who they are, where they come from, everybody has got a different perspective on what they are trying to accomplish and what they are comfortable with. I think the fact of the matter is what we’ve seen a lot at least with the clients that we deal with, is the simple fact that after going through the 08-09 crisis and going through the ups and downs of that, when it comes to long term money, a number of our clients are far more comfortable than they ever were because they realised it is a long term play and they are going to be ups and downs.

When it comes to shorter term money for the purpose of buying a home or saving for a child’s education, obviously they are a lot less comfortable with taking on risk. When all the dust settles, you know we have all seen it come through the fact there was recession and there was a very big downtake in the market, but we’ve all come through it and moving forward we want to make sure we take advantage of the uptake just as much.

Reporter: On the road to recovery lessons were learned, once wary clients are now regaining their footing in the marketplace.

Ed Rempel, Financial Planner, Ed Kempel & Associates,
Ed Rempel: I think our clients are not representative of Canadians in general, we spend a lot of time educating them on what happens, that there are going to inevitably be bear markets and these are the big buying opportunities, you have to see them as that. But they still see the news, so in general there has been a lot more fear in the market ever since 2008, now that people are basically recovered and back up and especially now with the global markets our investments are mostly global. The global market has been very strong in the last year, it the confidence is starting to recover.

Reporter: Some investors scarred from their losses may be looking for alternatives, while assessing where they went wrong and looking for another point of view.

Roberto Loren, Co-founder, The One Source Financial
Roberto Loren: A lot of people are really kind of tired with the stock markets, if you place your markets, if you place your money in the markets for at least a decade you will know that you have probably lost money. It’s only recently after 2010 that the people are starting to gain money, so there is an appetite in looking for other investment opportunities to invest in. They feel now that there are certain types of risks in the stock market and would wish to diversify a portion of their portfolio into alternative investments.

Sudhir Bhalla, Director, GN Financial Group
Sudhir Bhalla: Before the crisis, before this financial crisis which has happened in the marketplace, people were taking too many risks and during that crisis which nobody could predict, but they most of the people lost half of their fortune, but after that even though 4 or 5 years down the line, I still feel Canadians are, they are not taking them as those risks which they used to take, they are still looking for some kind of a guarantees and some kind of product which they can rely on, it’s not that they can lose the money and all this. So the people risk are still low risk profile, they don’t want to lose their money and as a financial planner also, what we are recommending to the people, the product which have some guarantees associated with it, so that they know what is going to happen down the line, not for today, for the future point of view as well.